Hostess sells Twinkies to investment firms for $410 million
14 Mar 2013
Hostess Brands has agreed to a sale of its iconic sweets Twinkies and Ding Dongs, Ho Hos, Sno Balls and Dolly Madison Zingers - to two investment firms with a shared history of corporate turnarounds.
The deal, worth $410 million, comes around four months after the last Twinkie rolled off the baking lines.
The sale would see Twinkies, which traces its history back more than 83 years to an Illinois industrial kitchen, would live on after surviving wars, recessions and a host of diets.
The new owners would be Apollo Global Management and Metropoulos & Company, owners of Pabst Blue Ribbon and Vlasic pickles. C Dean Metropoulos, the firm's chief and food industry veteran was expected to become the chief executive of the snack business.
The deal covers five Hostess factories, which the buyers hope to restart, and to begin restocking store shelves by the summer. Also the new company would almost certainly feature the Hostess name.
According to Daren Metropoulos, one of the senior Metropoulos' sons and an executive at the family firm, said in an interview that the company had a great consumer fan base that had not declined. He added the company saw a real opportunity to revitalise the brands.
The buyers have also dropped hints that Twinkies might also be available at a broader array of stores, including discount retailers like Dollar General.
The two investment firms were selected by Hostess as the buyer for Twinkies, Ding Dongs, Ho Hos and other Hostess cakes after no offers were received to top its $410 million offer, according to a filing in bankruptcy court Monday.
Metropoulos said in a statement regarding the Hostess deal that his firm was looking forward to having "America's favourite snacks back on the shelf by this summer."
According to a Hostess spokesman the company had no comment over there being no competing bids for Twinkies and the other Hostess cakes. Earlier, Hostess CEO Greg Rayburn had said the competition for those cakes would be "wild and wooly."
Hostess had earlier picked Flowers Foods as the buyer for Wonder and other major bread brands under similar condition of no competing offers. The sale of the breads and Twinkies would though need to be approved in bankruptcy court on 19 March.
The Irving, Texas-based company stopped making its cakes and breads in late November after announcing it was going out of business and closing its plants following years of financial struggles.
